Page:Popular Science Monthly Volume 37.djvu/343

Rh of this sort in her Constitution, but the domestic corporations in the State have not had a sufficient development to thoroughly test its influence. It will probably do but little good to secure minority representation on the board of directors, unless the laws are so drawn as to limit the tyranny of a majority of the directors. The State of Maryland and the city of Baltimore have derived but scant benefit from their privilege of appointing a minority of the directors of the Baltimore and Ohio Railroad. But if minority representation be backed by the proper legislation governing the actions of the directors, there is no doubt that it is an efficient way of checking the misdeeds of stock majorities..

In Germany there is a second body chosen, under special rules, by the stockholders, known as the board of supervisors (Aufsichtsrath). This board has the fullest possible power of investigation and report, but very little power of any other kind. Its usefulness must obviously depend on the rules governing its selection, since, if so chosen as to have interests wholly in common with the directors, it would be of no use as a check upon them.

Turning to the question of responsibility, we find that in this country the principle of limited liability is almost invariably the same for the director as for an ordinary stockholder, though the director is personally liable for all illegal or unauthorized acts. There has been a great deal of agitation of late for the introduction of the French plan of protecting ordinary stockholders by the grant of limited liability, but leaving the directors liable for the corporate debts to the full amount of their respective fortunes. The experience of France with these societés en commandite has proved that responsible men can be found to manage any legitimate enterprise under this plan. A recent English act permits the formation of such companies in England, but the companies decline to adopt this principle under mere permissive legislation. To make this form of organization mandatory upon certain selected classes of our corporations is an experiment that ought to be tried, and is much better than going back to the old plan of unlimited liability for stockholders, as California has done.

Under the head of the responsibility of the directors must also be treated the question of the relation of the corporation to its employés. Albert Fink one day called together the presidents of certain roads he was trying to organize for their mutual good, and told the gentlemen who responded to his call that he wanted them all to resign. He further explained that this was advisable in order that their general freight agents might thereafter be nominally, as then actually, in charge of the several properties. The Interstate Commerce Association went down very largely because the "gentlemen" who were partners to the agreement could